>>> What to look at today - 17th of April 2015

Dow-0,04% S&P-0,08% Nasdaq-0,06% Russell-0,19%
US Market closed slighlty lower but manage to recover from morning lows. indices struggled in the early going after an overnight report from the Financial Times indicated that Greek officials have asked the International Monetary Fund to reschedule debt repayments that will be due in May. The report was denied by Greek Finance Minister Yanis Varoufakis, but European investors displayed caution, which contributed to the lower start in the U.S.a batch of better than expected earnings offset the Greece-related news...Volume were in line with average @ 740mil shares...US after hours CE +14.4%, MAT +6.7%, CHKE +3.4%, PRO -17.9%, STRM -9.3%, AMD -9.0% following earnings/guidance...Late in the US trading session, a report from Fed watcher Hilsenrath pointed to a spate of softer economic data creating some uncertainty among the FOMC members about the timing of the liftoff in rates. The report noted the general increase in economic data shortfalls have reduced expectations of a June liftoff significanly and Sept hike probability has also moved lower. Hilsenrath added that most Fed officials see Q1 slowdown as temporary, but would likely prefer more time to ensure a sustainable rebound is taking place....Shanghai Composite was up over 2% in the morning session and headed for its 6th straight week of gains, rising to fresh 7-year highs just below 4,300. Economic calendar was sparse in both the Asia and US hours, with the focus turning to Friday's US CPI figures. In the mean time, investors on the mainland were enthused by more positive rhetoric from policymakers. China Securities Regulatory Commission (CSRC) Chairman Xiao noted the current bull market would last longer than the last upswing just before the GFC, though he did urge "rational" investing. Separately, the State Council promised to continue to promote steady trade growth, streamlining infrastructure construction at China's ports. Lastly, NDRC said new measures to stabilize growth and support employment, which has been slacking in recent datapoints, were in the pipeline. On the down note, S&P warned more China property developers, particularly in smaller cities, could default this year.

Nikkei -1.05% Hang Seng +0.24% Shanghai +2.20%

RUB $49.9940 EURCHF 1.0351 CHF 0.9577 Eur$ 1.0770 WTI $56.19 (-0.92%)

S&P -0.10% EuroStoxx +0.03% Dax -0.18% SMI -0.18%

Macro :
- Lagarde Says She Won’t Support Greece Missing Payment to IMF
- Risks Ignored in Europe as Bond Buying Distorts Credit Markets


Keep an eye on :
- ABE SM : Abertis Shares Placed at EU16.40 Per Share in Bookbuild
- ANIM IM : Anima Open to Aggregator Role; May Use Debt, Equity Funding: CEO
- ATO FP : Capgemini, Atos in Talks to Buy IGATE, Business Standard Says
- SFER IM : Ferragamo Has No Plan to Cut Prices for ‘Time Being,’ CEO Says
- LG FP : Lafarge to Sell U.S. Plant to Summit as It Seeks FTC Merger Nod
- MRL SM : Merlin Plans to Buy 30% of Testa From Sacyr, Expansion Says
- NESN VX : Nestle 1Q In Line, Shrs May Stay Neutral Today, Exane Says
- POM FP : Plastic Omnium Aims to Double China Sales to EU1 Billion in 2018
- RCL NO : Meyer in Talks With Royal Caribbean on Order: Helsingin Sanomat
- RWE GY : RWE Div. Cut of 26% in 2016 ‘Inevitable’ on Taxes: Berenberg
- SCH NO : Schibsted to Introduce New Class of B-Shares Through Shr Split
- SKFB SS : SKF Sees Unchanged 2Q Demand After 1Q Profit Slightly Below Est.
- SYNN VX : Syngenta 1Q Sales Miss Estimates, Repeats 2015 Outlook ,Syngenta CEO Says Co. Has Mostly Put Together Crop Plans
- UNI IM : UnipolSai Sold Entire Stake in Sorin Through Bookbuilding, UnipolSai Sold Sorin Shrs at EU2.81/Shr for Total EU61.4m

>>> Brokers Upgrades & Downgrades -17th of April 2015

>>> Up
*DEBENHAMS RAISED TO BUY VS NEUTRAL AT CITI
*JERONIMO MARTINS RAISED TO BUY VS NEUTRAL AT CITI
*QINETIQ RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*MANITOU RAISED TO NEUTRAL VS REDUCE AT ODDO
*OXFORD INSTRUMENTS RAISED TO OVERWEIGHT AT BARCLAYS
*THALES RAISED TO CONVICTION BUY VS NEUTRAL AT GOLDMAN

>>> Down
*ALCATEL-LUCENT CUT TO NEUTRAL VS BUY AT UBS
*BASF SE CUT TO HOLD VS BUY AT BANKHAUS LAMPE
*BAYER CUT TO EQUAL-WEIGHT AT MORGAN STANLEY
*BOLIDEN CUT TO HOLD AT SOCIETE GENERALE
*DOMINO PRINTING SCIENCES CUT TO EQUALWEIGHT AT BARCLAYS
*K&S CUT TO HOLD FROM BUY AT EQUITA
*MTU AERO CUT TO NEUTRAL VS BUY AT GOLDMAN
*ONTEX CUT TO HOLD AT SOCIETE GENERALE
*ROTORK CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*RWE CUT TO SELL VS HOLD AT BERENBERG
*SGS CUT TO REDUCE VS NEUTRAL AT ODDO
*TELENOR ASA CUT TO HOLD VS BUY AT DEUTSCHE BANK

>>> PT Change


>>> Initiation
*AENA SA RATED NEW SECTOR PERFORM AT RBC, PT EU95
*BALFOUR BEATTY RATED NEUTRAL VS NOT RATED AT JPMORGAN
*COBHAM REINSTATED NEUTRAL AT GOLDMAN
*FINMECCANICA REINSTATED BUY AT GOLDMAN
*MONEYSUPERMARKET RATED NEW OVERWEIGHT AT BARCLAYS, PT 315P
*SAIPEM RATED NEW UNDERWEIGHT AT JPMORGAN, PT EU9.5
*TECHNIP RATED NEW OVERWEIGHT AT JPMORGAN, PT EU68.73
*URBAN & CIVIC RATED NEW NEUTRAL AT JPMORGAN, PT 300P

>>> Call
>> Stock
*CASTELLUM ADDED TO CONVICTION BUY LIST AT GOLDMAN
*DASSAULT SYSTEMES ADDED TO GOLDMAN CONVICTION BUY LIST
*EUROCASH SA REMOVED FROM GOLDMAN CEEMEA FOCUS LIST, STAYS BUY
*HUNTING ADDED TO CONVICTION BUY, DOR FOCUS LISTS AT GOLDMAN
*PETROFAC REMOVED FROM GOLDMAN CONVICTION BUY LIST, STAYS BUY
*THALES RAISED TO CONVICTION BUY VS NEUTRAL AT GOLDMAN

After Hours Summary: CE +14.4%, MAT +6.7%, CHKE +3.4%, PRO -17.

After Hours Summary: CE +14.4%, MAT +6.7%, CHKE +3.4%, PRO -17.9%, STRM -9.3%, AMD -9.0% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: CE +14.4%, MAT +6.7%, CHKE +3.4%, SLB +2.5%, CYT +2.2%, MFLX +0.7%

Companies trading higher in after hours in reaction to news: TRXC +58.0% (announced completion of good laboratory practice studies using the SurgiBot system; co stated it remains on track to submit its FDA 510(k) filing in mid-2015), SSH +6.3% (announced that the FDA has reviewed co's submission regarding the COUNTER HF's U.S. pivotal study pause and requested minor protocol changes be submitted in order to receive approval to resume patient enrollment), GIG +3.7% (Fred H. Brenner disclosed 7.05% passive stake in 13G filing), SM +3.7% (announced that Q1 production is expected to be 16.8 MMBOE, or 186.4 MBOE/d; borrowing base maintained at $2.4 bln), ARCO +1.5% (announced that coffee sales at McDonald's (MCD) Brazil set a new 7-day record in early April, serving 66 mln liters between April 1 and April 7, up 34% from the same period a year ago), KALU +0.9% (announced the authorization of a $100 mln increase in its share repurchase authorization), HAL +0.7% (Reuters reporting co has engaged Bank of American and Deutsche Bank to assist with sale of assets worth up to $5 bln)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: PRO -17.9%, STRM -9.3%, AMD -9.0%, NOW -8.8%, MTW -3.5%, AXP -1.4%

Companies trading lower in after hours in reaction to news: DSCO -13.0% (co announced it has voluntarily ceased commercialization of SURFAXIN; announced restructuring involving workforce reduction by ~50%), WPCS -5.2% (following a Special Meeting the Board determined it was in the best interests of the Company to effect a reverse split of the issued and outstanding common stock at a ratio of 1-for-22), TC -4.5% (reported Q1 total concentrate production for Mount Milligan was 30.3 thousand dry tonnes, with 15.4 mln pounds of payable copper and 46.k ounces of payable gold), ASND -3.5% (disclosed that its collaboration partner, Sanofi (SNY) has decided to cease development of TransCon insulin

>>> Asian Update

Asian Mid-session Update: Shanghai Composite makes fresh 7-year highs on CSRC vote of confidence


***Economic Data***
- (SG) SINGAPORE MAR ELECTRONIC EXPORTS Y/Y: 10.4% V 2.0%E; NON-OIL DOMESTIC EXPORTS M/M: 23.0% V 3.5%E; Y/Y: +18.5% V -1.1%E
- (CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 3.00%, AS EXPECTED
- NPD: Mar US total video game sales $963.7M, -6% y/y

***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 -0.5%, S&P/ASX -0.9%, Kospi +0.1%, Shanghai Composite +1.3%, Hang Seng +0.2%, Jun S&P500 -0.1% at 2,099

***Commodities/Fixed Income***
- Jun gold flat at $1,197/oz, May crude oil -1.2% at $56.04/brl, May copper +0.1% at $2.78/lb
- (JP) BOJ offers to buy ¥400B in 5-10yr JGBs, ¥240B in 10-25yr JGBs amd ¥140B in JGBs with maturity over 25-yr as well as ¥2.75T in T-bills
- (AU) Australia MoF (AOFM) sells A$700M in 2.75% 2019 Bonds; avg yield: 1.8806%; bid-to-cover: 5.78x
- (CN) China MoF sells 3-yr bonds at 3.21% yield
- USD/CNY: PBoC sets yuan mid point at 6.1267 v 6.1305 prior setting (strongest Yuan setting since Feb 6th)
- (US) Weekly Fed Balance Sheet Total Assets for week ending Apr 15th: $4.49T v $4.48T prior; M1 y/y change: 9.3% v 9.2% w/w; M2 y/y change: 6.2% (6-month high) v 6.1% w/w

***Market Focal Points/FX***
- Shanghai Composite was up over 2% in the morning session and headed for its 6th straight week of gains, rising to fresh 7-year highs just below 4,300. Economic calendar was sparse in both the Asia and US hours, with the focus turning to Friday's US CPI figures. In the mean time, investors on the mainland were enthused by more positive rhetoric from policymakers. China Securities Regulatory Commission (CSRC) Chairman Xiao noted the current bull market would last longer than the last upswing just before the GFC, though he did urge "rational" investing. Separately, the State Council promised to continue to promote steady trade growth, streamlining infrastructure construction at China's ports. Lastly, NDRC said new measures to stabilize growth and support employment, which has been slacking in recent datapoints, were in the pipeline. On the down note, S&P warned more China property developers, particularly in smaller cities, could default this year.

- Down under, Australia's 2nd largest energy producer Santos reported Q1 output growth of 15% and affirmed FY15 production and capex guidance in spite of the lower oil prices. Australia's top coal miner Whitehaven also reported y/y growth in coal sales of 3.7MT. Both STO and WHC moved slightly higher on those results despite a moderate decline in the broader index.

- Late in the US trading session, a report from Fed watcher Hilsenrath pointed to a spate of softer economic data creating some uncertainty among the FOMC members about the timing of the liftoff in rates. The report noted the general increase in economic data shortfalls have reduced expectations of a June liftoff significanly and Sept hike probability has also moved lower. Hilsenrath added that most Fed officials see Q1 slowdown as temporary, but would likely prefer more time to ensure a sustainable rebound is taking place.

***Equities***
US equities / ADRs:
- CE: Reports Q1 $1.72 v $1.32e, R$1.45B v $1.65Be; +15.6% afterhours
- MAT: Reports Q1 -$0.08 (adj) v -$0.09e, R$923M v $898Me; +6.5% afterhours
- SLB: Reports Q1 $1.06 v $0.97e, R$10.2B v $10.7Be; Lowers CAPEX guidance 17% to $2.5B; To cut 2K jobs (about 1.7% of workforce); +2.4% afterhours
- AXP: Reports Q1 $1.48 v $1.37e, R$7.95B v $8.21Be; -1.6% afterhours
- MTW: Guides FY15 foodservice segment revenues down to be approximately flat y/y (prior FY15 foodservice rev mid single-digit percentage growth); -4.6% afterhours
- NOW: Reports Q1 +$0.02 v -$0.00e, R$212M v $211Me; -8.6% afterhours
- AMD: Reports Q1 -$0.09 v -$0.06e, R$1.03B v $1.08Be; -11.2% afterhours

Notable movers by sector:
- Consumer Discretionary: Air China 601111.CN +3.1% (Q1 guidance)
- Financials: Bank of East Asia 23.HK +3.0% (cooperation with Tencent's WeBank)
- Materials: Base Resources BSE.AU +4.4% (Q4 production results); Whitehaven Coal WHC.AU +1.8% (Q3 op results)
- Energy: Santos Ltd STO.AU +0.9% (Q1 production results); JX Holdings 5020.JP +2.2% (speculation on FY15/16 results); Anton Oilfield Services 3337.HK -5.6% (Q1 new orders)
- Industrials: China Communications Construction 601800.CN +5.3%, China State Construction Engineering 601668.CN +6.9% (China to unveil infrastructure investment plan in Pakistan)
- Technology: Sharp Corp 6753.JP -4.3% (said to scale back LCD TV, solar business, cut staff)

>>> US Close Dow-0,04% S&P-0,08% Nasdaq-0,06% Russell-0,19%

Closing Market Summary: Stocks End Flat Amid Mixed Earnings

The major averages ended Thursday on a modestly lower note, but they were able to climb off their opening lows. The S&P 500 shed 0.1% after spending the day in a 12-point range.

Equity indices struggled in the early going after an overnight report from the Financial Times indicated that Greek officials have asked the International Monetary Fund to reschedule debt repayments that will be due in May. The report was denied by Greek Finance Minister Yanis Varoufakis, but European investors displayed caution, which contributed to the lower start in the U.S.

However, a batch of better than expected earnings offset the Greece-related news. The S&P 500 ranged near its low during the opening hour and climbed into the afternoon. The index spent about an hour in the green, but slipped back into the red before the close.

Only three sectors registered gains, but most of the decliners finished not far below their flat lines. The utilities (-0.6%) sector was the weakest performer, but that had little impact on the market since the sector makes up just 3.0% of the S&P 500.

Elsewhere among countercyclical groups, the consumer staples sector (+0.4%) spent the day atop the leaderboard thanks to better than expected earnings and upbeat guidance from Philip Morris (PM 84.96, +6.83).

Moving to the cyclical side, the consumer discretionary sector (+0.2%) outperformed with help from the shares of Netflix (NFLX 562.05, +86.59), which surged 18.2% to a new record high after the company beat bottom line estimates. The big spike in Netflix overshadowed losses among homebuilders brought on by a disappointing Housing Starts report. The iShares Dow Jones US Home Construction ETF (ITB 27.91, -0.53) lost 1.9%.

Similar to the discretionary sector, financials (+0.1%) held a slim gain throughout the day after two major components reported earnings. Citigroup (C 54.02, +0.81) gained 1.5% in reaction to its bottom-line beat while Dow component Goldman Sachs (GS 200.21, -0.89) shed 0.4% despite beating estimates and boosting its quarterly dividend to $0.65/share.

On the downside, the technology sector (-0.3%) could not make it out of the red as chipmakers weighed after SanDisk (SNDK 67.97, -3.15) missed earnings expectations and guided below consensus while Taiwan Semiconductor (TSM 23.24, -0.27) beat on the bottom line beat, but issued cautious revenue guidance for Q2. The two lost 4.4% and 1.2%, respectively while the PHLX Semiconductor Index fell 0.5%.

Treasuries spent some time on either side of their flat lines before ending just above the unchanged level. The 10-yr yield slipped one basis point to 1.89%.

Today's participation was in-line with recent averages as roughly 740 million shares changed hands at the NYSE floor.

Economic data included Initial Claims, Housing Starts, and Philadelphia Fed Survey:
  • The initial claims level increased to 294,000 for the week ending April 11 from an upwardly revised 282,000 (from 281,000) while the consensus expected a decline to 280,000 
    • Despite the increase, the four-week moving average was virtually unchanged at 283,000, a level last seen in 2000 
    • Continuing claims fell to 2.268 million from an upwardly revised 2.308 million (from 2.304 million) while the consensus expected an increase to 2.325 million 
  • Housing starts increased 2.0% in March to 926,000 from an upwardly revised 908,000 (from 897,000) in February while the consensus expected an increase to 1.045 million 
    • In February, housing starts dropped 15.3%, which was blamed on adverse weather, meaning starts should have rebounded in the hardest hit areas of the country 
      • The Northeast did return to January levels, as expected, but the rebound in the Midwest was poor and remained well below previous trends 
      • Furthermore, starts in the unaffected West (-19.3%) and South (-3.5%) fell to levels not seen since the first half of 2014, suggesting economic reasons and not weather bear responsibility for the lackluster start to the year 
  • The Philadelphia Fed's Business Outlook Survey increased to 7.5 in April from 5.0 in March while the consensus expected an increase to 7.2 
Tomorrow, March CPI (consensus 0.3%) will be reported at 8:30 ET while March Leading Indicators (expected 0.3%) and the preliminary reading of the Michigan Sentiment Index for April (expected 94.0) will be released at 10:00 ET.
  • Russell 2000 +5.8% YTD 
  • Nasdaq Composite +5.7% YTD 
  • S&P 500 +2.2% YTD 
  • Dow Jones Industrial Average +1.6% YTD

WSJ : Fed’s Fischer: U.S. Economy Should Rebound After ‘Poor’ First Quarter

The U.S. economy had a weak start to 2015 but growth should rebound going forward, Federal Reserve Vice Chairman Stanley Fischer said Thursday.

“There’s definitely a rebound on the way already, and we’ll see at what speed it proceeds,” Mr. Fischer said during an interview on CNBC. “The first quarter was poor. That seems to be a new seasonal pattern. It’s been that way for about four of the last five years.”

The effect on the Fed’s policy decisions, he said, depends on “how quickly we come out. If you look at last year, we had negative growth in the first quarter and then spectacular growth which made up for that. We don’t know what’s going to happen in the second quarter here yet.”

Mr. Fischer said he expects “a recovery” but “whether it will be spectacular or just moderate is hard to say now.”

Most officials at the U.S. central bank expect to begin raising short-term interest rates this year, but the precise timing of the first rate increase remains uncertain.

Richmond Fed President Jeffrey Lacker said Wednesday that he thinks a “strong case” can be made to raise rates at the Fed’s June policy meeting, and suggested the economy’s recent performance may have been weighed down by temporary factors.

But New York Fed President William Dudley said last week that the recent stretch of weak economic data means “it’d be reasonable to think that the timing of the Fed’s first rate hike might be a little further off in time. I can imagine a situation where a June rate hike could still be in play…but obviously it’s a bigger hurdle because we’ve had a lot of weak data. Now you have to see sufficient data on the other side. Now the bar is a little higher.”

Mr. Fischer said on Thursday that the Fed will try to raise rates “at the best possible time. We’d like to see the economy beginning to grow again and grow at a decent rate, and we’d like to see unemployment continue to come down and some signs that inflation is…heading toward the 2% target.”

U.S. wage growth has been stagnant for years, but many economists expect pay raises will accelerate as the labor market continues to tighten. “There are more signs every day, and lots of papers come through my computer explaining that this is the turning point, right now,” Mr. Fischer said. “But they’ve been coming for a while.”

He also commented on overseas growth, saying the eurozone’s outlook has improved in part thanks to the European Central Bank‘s bond-buying program, sometimes called quantitative easing or QE.

“First of all, like us, they have the impact of the lower price of energy and of gasoline,” Mr. Fischer said. “And now they have done what everybody told them to do for a very long time. They’re doing QE and it’s far more successful, at this point, than the general view had been before this started. So yeah, they’ve got some wind in their sails.”

(BFW) ECB May Decide in Months on QE-Eligible Corporate Debt: Hansson

ECB May Decide in Months on QE-Eligible Corporate Debt: Hansson
2015-04-16 14:50:37.451 GMT


By Ott Ummelas
(Bloomberg) -- ECB Governing Council member and Estonian
central bank Governor Ardo Hansson speaks in interview w/ Kuku
Raadio.
* Decision by ECB on Wednesday concerning institutional debt
purchases represents “first stage”of discussion over what
debt can be purchased aside from govt bonds as part of QE
* “In the second stage it will be discussed -- we hope during
the coming months -- how much real-sector corporate debt
should be bought. As there has been talk of state-owned
Eesti Energia and Elering in our case, they would be part of
that group. No decisions have been made yet”
* Bonds issued by Estonian electricity, gas grid operator
Elering are more likely to get approval because “this is
clearly a monopoly and no questions about distorting
competition can be raised”
* NOTE: Estonia’s central bank bought EU117m worth of
institutional debt as part of QE in March as Estonia has no
government bonds
* NOTE: Estonian Central Bank May Buy State Utilities’ Bonds:
Postimees


For Related News and Information:
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To contact the reporter on this story:
Ott Ummelas in Tallinn at +372-663-1128 or
oummelas@bloomberg.net
To contact the editors responsible for this story:
Balazs Penz at +36-1-881-0227 or
bpenz@bloomberg.net